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Elder Financial Abuse –
Why Should You Care?
By Bennett Blum, MD
One out of six elderly people will become victims of financial exploitation.
One out of six.
That was the consensus of the top experts in the United States in the field of elder financial abuse during a 2005 policy planning meeting for the White House Conference on Aging. Furthermore, the average victim will lose ~30% of his or her net worth, and is many times more likely to become ill or die. Yet despite this human tragedy, 80-95% of cases are never reported to authorities or people who could intervene. Perpetrators destroy lives and abscond with assets that would otherwise benefit the elders and their communities.
The true economic impact is much greater. Elder financial abuse creates costs to local, state, and federal government agencies, as well as to businesses that employ people – often in middle- or upper-management - who are concerned about the welfare of a parent or grandparent, and are now worried about their care. Elder care and concern costs US corporations at least $29 billion per year, and reduces the lifetime earnings of every affected caring, and employed family member by ~$700,000. Current estimates place these additional, unnecessary, costs at dozens to hundreds of billions of dollars annually.
If that is not enough, consider this – 1) when financial abuse occurs, it is often associated with other forms of abuse, such as emotional abuse, physical abuse, and neglect; 2) all of this country's experts agree that the problem is getting worse.
Types of Financial Exploitation
There are two main forms of financial exploitation or EFA (Elder Financial Abuse). The first type is "consumer fraud" – i.e. identity theft; stealing credit cards or PIN numbers; internet scams; telemarketing scams, etc. The second is sometimes referred to as an "affinity scam" or "the brand new best friend." An "affinity scam" is one in which a person or organization claims to share similar values with the victim, then uses the claim to establish a relationship that is later betrayed. Variations on this include "sweetheart scams" and some acts of professional misconduct.
Types of Perpetrators
There are two major types of perpetrators – opportunists and predators. Their ultimate tactics may be similar, but they differ in initial intent and behavior. "Opportunists" are usually family members or friends who have good intentions when they begin caring for an elder; however, long-term care giving is physically, financially, and emotionally draining. In informal surveys of family caregivers in a university geriatric medicine clinic, more than 98% admit to having fantasies of abandoning or harming the elder. Most never act on these thoughts. Those who do begin by rationalizing small betrayals – such as: using the elder's credit card to buy their own groceries or gas; using the elder's vehicle for personal errands; or o using their relationship to obtain loans or gifts for the caregiver's benefit. In the classic pattern, the rationalizations increase until the caregiver is engaged in frank financial abuse.
"Predators" are criminals who purposefully seek out elderly victims because of their vulnerabilities. These perpetrators place themselves in "victim-rich environments" such as senior centers, religious institutions, support groups, or home care businesses. They may conduct surveillance of potential victims and their families for weeks or months. These offenders enter situations with the intent to steal, defraud, or exploit. Other forms of abuse often follow, particularly murder, because – as one police investigator correctly noted – "once the money is gone, all that's left is a witness."
Certain religious and charitable institutions are known to train people to be perpetrators. They target wealthy elderly people and intensify their efforts when the elders become medically impaired, isolated, or widowed. The programs train people to beome a "new best friend" and convince the elders to change their estate plans, or in vivo gift-giving, so as to benefit the institution. The local chapter and/or perpetrator then receive a kickback.
What To Do?
Two of the major issues that benefit perpetrators are: 1) mistaken ideas about mental capacity; and 2) mistaken ideas about undue influence. Both of these will be covered in more detail in articles published over the next several months.
In the meantime, there needs to be greater awareness of the problem and better communication between agencies. Here are two organizations and websites dedicated to elder abuse awareness, prevention, and intervention:
1. The National Center on Elder Abuse (NCEA) is a gateway to resources on elder abuse, neglect, and exploitation. Web: http://www.elderabusecenter.org.
2. The Clearinghouse on Abuse and Neglect of the Elderly (CANE), is the nation's largest archive of published research, training resources, government documents, and other sources on elder abuse. The CANE collection is fully computerized. Web: http://www.elderabusecenter.org/default.cfm?p=cane.cfm.
Other suggestions for action:
1. Obtain the name and contact information for the local elder abuse multi-disciplinary team (MDT) or Fiduciary Abuse Specialist Team (FAST). Start one if it does not already exist.
2. Obtain the name and contact information for the Elder Abuse Unit at local law enforcement (police and/or sheriff's department).
3. Join the NCEA's "Elder Abuse" listserve, available at: http://www.elderabusecenter.org/default.cfm?p=listserve.cfm
4. Become active in the local and state bar association "Elder Law" and "Probate" sections.
Dr. Blum is an expert in the field of elder abuse and has consulted for the United Nations, the White House, the US Senate, international tribunals, the American Bar Association, and numerous other groups in the United States and the Western Hemisphere. More information about elder financial abuse, and Dr. Blum, is available on his website: www.bennettblummd.com
Dr. Blum and LexisNexis CaseMap have recently produced the first in a series of Internet-based presentations on the topic of "Elder Financial Abuse and Undue Influence." This "Webinar" may be viewed at: https://casesoft.webex.com/casesoft/onstage/tool/record/viewrecording1.php?EventID=387742112